Green and growing

Visitors to Other World Computing's Woodstock, Ill., distribution center can be forgiven if they find themselves wondering whether the company is taking its name a bit too seriously. Looming beside the building is a giant white figure with whirling arms that looks (if you squint hard) like a visitor from another planet.

It's not an invader from "The War of the Worlds." The three-armed "giant" is actually a wind turbine owned by Other World Computing (OWC), an online retailer and maker of hardware, software, and accessories for Apple computers. The turbine—194 feet tall if you count the blades—produces more than enough electricity for the company's entire operation, including the 40,000-square-foot DC and manufacturing facility. It produces an estimated 1.25 million kilowatt hours annually, up to twice what the company's corporate campus requires in a year, says Ryan O'Connor, OWC's warehouse operations and logistics manager and occasional wind-turbine maintenance guy.

The turbine, installed in 2009, is just one facet of OWC's efforts to incorporate environmentally sustainable practices into its business. The company constructed its Woodstock campus in 2008 to comply with Leadership in Energy and Environmental Design (LEED) standards. Thanks to innovations in such areas as energy production and usage, lighting, construction materials, heating and cooling, water conservation, and landscaping, the facility and grounds in 2010 earned LEED Platinum status, an achievement claimed by fewer than 300 facilities worldwide. (See sidebar, "OWC's DC goes Platinum.")

OWC is deeply committed to the environment, but it hasn't sacrificed speed or efficiency in its distribution center in order to achieve its green goals. Quite the opposite, in fact: OWC's focus on green principles is helping it run a more efficient, cost-effective operation.

"OLD SCHOOL" MEETS NEW DESIGN
Other World Computing sells a wide range of data storage devices, solid-state drives, and memory upgrade solutions (mostly assembled and packaged in house); accessories for Macintosh computers; and accessories for iPads and iPhones. Most orders come from consumers and small businesses, but OWC also sells to selected retailers and third-party vendors. More than 90 percent of the orders filled at the Woodstock DC contain an item that was packaged and/or assembled on site.

The Woodstock DC ships nearly half a million orders annually. Most are small, and many consist of just one or two items. OWC aims for same-day shipping and real-time order fulfillment whenever possible, a goal it has achieved for the vast majority of the assemblies and other products it sells. Orders are batch-processed every 20 minutes, so "there's a very high likelihood that an order will be picked and shipped within 40 to 50 minutes," O'Connor says. Customers frequently take advantage of OWC's Priority Expedited Service, which provides next-day, early morning delivery to many markets for orders placed by 10: 30 p.m. Central time. (OWC recently opened a second distribution center in the Southwest to better serve customers in that region and on the West Coast.)

The company is a heavy user of express parcel services, primarily the U.S. Postal Service, FedEx, UPS, and DHL. Volume is great enough that the DC fills an average of 10 to 15 standard 4- by 4- by 4-foot containers daily; during the holiday season, it may ship out 50 containers a day.

A few years ago, order volumes threatened to exceed the still-new facility's capacity. OWC needed to increase capacity but didn't want to leave its energy-efficient DC or add another building. After considering several proposed material handling systems, the online retailer chose a solution developed by Grand Rapids, Mich.-based Dematic that has doubled the DC's order throughput capacity in the same space—without compromising OWC's service standards or environmental principles.

The picking, packing, and shipping process used today combines paper pick tickets with bar codes, optical scanning, energy-efficient conveyors, and a labor-saving sortation system. O'Connor calls it "a very efficient combination of old school and new" approaches to order fulfillment.

The picking process is directed by the facility's warehouse management system (WMS), which includes a pick-prioritization system that presorts the discrete orders and prints bar-coded pick tickets in the correct sequence based on item location and order class: singles/pairs of collocated items, or multi-item orders. In each batch, pickers select the small, high-flow orders and then go back for multi-piece orders. Each item is labeled with a unique bar code reflecting its serial number, a practice that has resulted in a fulfillment accuracy of 99.99 percent.

The majority of the items OWC sells are small in size, and most orders consist of between one and five pieces. Each order is picked into its own container: a small, plastic tote for the larger, multi-item orders, and a vinyl envelope for many of the small orders. "This allows for very compact picking lanes and bin locations, with like or commonly picked items located close or adjacent to each other," O'Connor says.

The parallel pick aisles are just 12 feet long, so pickers can fill a large number of orders with minimal steps. When an order is complete, the picker delivers it to one of nine order processing stations, which are located at the end of each lane. There, each item is scanned, and ceiling-mounted cameras record the items in the shipping carton. After the serial numbers have been confirmed (or "committed"), the package is sealed, weighed for quality control and shipping fees, labeled, and placed on an adjacent conveyor. The packages are conveyed through a scan tunnel, which reads the shipping bar code on the top of the carton.

The associated sortation system automatically diverts each carton to the appropriate parcel consolidation container in the shipping area. OWC can program the system for each day's mix of orders and carriers, and the sorter will push the cartons and envelopes to the correct loading stations. "We used to do all that manually," O'Connor says. "That was an area where we saw a huge labor savings while eliminating parcel-to-carrier sortation errors altogether."

OWC has deployed some other technologies in its order processing and shipping processes, such as multicarrier shipping software integrated with its enterprise resource planning system. So why not go with a fully automated system? "OWC's application of technology is a highly targeted process, rather than a blanket approach," O'Connor says. "We have found that our paper-based system—combined with effective pick-routine strategies and a targeted, compact facility layout—provides the efficiencies required to meet our current and future order picking needs."

SAME SPACE, TWICE THE THROUGHPUT
The new picking lane, conveyor, and sortation setup, which went live in November 2011, reflects OWC's green approach to operations. Because the system reduces errors, it saves electricity and fuel that would have been consumed by re-shipments or supplemental shipments, O'Connor notes. The conveyor system, moreover, uses 40 percent less electricity than its predecessor. It saves energy by running only when optical sensors detect packages. "Before, we ran a zero-pressure accumulator for 16 hours a day. It was always on, drawing juice," O'Connor recalls. "The new system wakes up when we need it and goes to sleep when we don't."

Dematic's engineers were able to narrow the width of the conveyor and reduce its length by half compared with the previous configuration. Yet order fulfillment capacity has doubled, according to O'Connor. "We are approaching half a million orders, which would have been the maximum capacity of our old system. This system is capable of sorting over 1 million orders in the same footprint."

The new system is modular and easy to reconfigure or scale up or down. OWC is pleased that its Platinum LEED facility can now handle whatever comes its way. "In consumer electronics, we have to be extremely flexible because of the nature of the business," O'Connor says. "When a new device comes out, the whole game changes. If we cannot react overnight, then we can lose our advantage. We need very high levels of rapid flexibility, with very little investment required to make changes."

Editor's note: For a peek inside OWC's main warehouse, take the "virtual tour on OWC's website." For more about OWC's parcel shipping system, see "Going postal (in a good way)," DC Velocity, March 2012.